posted 4 years ago

New Road Tax Rules Explained

New road tax rules explained: tax disc, buying and selling a vehicle, paying by direct debit.

Road Tax Rules: Misunderstandings Lead To Fines

Confusion surrounding the replacement of the tax disc with an electronic equivalent has caused motorists to inadvertently break the law. Some have been fined and had their vehicle towed.

Road Tax Rules: What Were They?

Prior to October 1st 2014, a vehicle had to display a circular paper tax disc. This confirmed the excise duty was paid until (say) March the next year which helped the police check compliance. Tax could – at a seller's discretion - stay with the vehicle if its ownership was transferred as an incentive to sweeten the deal. Its value could be several hundred pounds, after all. Neither a seller or buyer had to act in this scenario. Tax automatically remained unless a seller claimed it. If so, a refund for any remaining whole months followed and the buyer arranged new tax prior to collection. 

Road Tax Rules: What Changed?

On October 1st 2014, the Driver Vehicle Licensing Agency stopped issuing the paper tax disc. Existing discs – even those with nearly one year remaining – lost any value (except to collectors). It is part of an initiative to cut red tape and save money. Enforcement now comes via a computerised database that spits out a fine if tax has not been paid. Number plate recognition cameras play a role too. As of the same date the rules for buyers/sellers also changed.

Road Tax Rules: Selling A Vehicle

The Driver Vehicle Licensing Agency cancels a vehicle's tax if it is sold and reimburses any remaining whole months. The process is automatic and compulsory. There is no option to leave tax on as a sales incentive. Furthermore it is automatically refunded if the vehicle is scrapped, exported, becomes subject to a Statutory Off Road Notification (SORN), or transferred to an exempt tax grouping.

Road Tax Rules: Buying A Vehicle

The buyer of a second-hand vehicle has to arrange tax prior to collection. It can be paid at He/she requires the twelve digit reference number from the New Keeper Supplement part of the Vehicle Registration Certificate (V5C/2). Alternatives include the Post Office where the cashier needs the V5C/2, or the DVLA twenty-four hour phone service that can be contacted on 0300 123 4321. The buyer can confirm the vehicle is taxed – and for how long - online via

Road Tax Rules: Paying By Direct Debit

Since October 2014, a motorist can pay road tax by direct debit. Payments can be annually, six-monthly, or monthly. Assuming the vehicle has a valid MOT (if required) payments continue until cancelled by the motorist or the vehicle is sold, etc. A direct debit cannot be set-up for a first registration vehicle, a fleet scheme vehicle or heavy goods vehicle subject to the Road User Levy.